D.C. Population Set to Break 600,000 Mark

I just heard on ABC (Channel 7 here in DC) that our population here in Washington DC is increasing and is going to break 600,000!!! This is the first time in decades to be at this population. See post below from the ABC web site (http://www.wjla.com/news/stories/1209/691770.html) Also noted was there are fewer people applying for Drivers Licenses here in "The District". This proves my point to new buyers that a parking space is no longer "required" as it was in the past here in DC. The metro continues to grow as do neighborhoods around metros; lessening the need to have a vehicle. Times are good here in DC!!!!!! -Lance


D.C. Population Set to Break 600,000 Mark

posted 12/31/09 9:28 am

WASHINGTON, D.C. - Washington D.C.'s population is set to break 600,000 again.

Recently released Census Bureau statistics show the city had an estimated population of 599,657 as of July 1. That's nearly 9,600 more than the previous year. It's also the first time in decades that the city has not had a net population loss as residents moved into the suburbs or elsewhere in the country.

The city will get an official head count with the 2010 Census, but the most recent count is the city's highest since 1991 when it was approximately 601,000.

893....can you believe it???

Yep,.....893!

That is the number of ACTIVE Condos for sale in Washington DC today in the MRIS. This is the first time we have seen the number drop below 900 FOR MANY YEARS!!!

There are a couple reasons for such a low number....

1) LACK OF NEW CONSTRUCTION-New construction ceased several years ago but it has taken the past four years for us to absorb the extra surplus. Few Developers are working on or finishing projects currently and bank-lent money is limited (non-existent) for any new projects.

2) SEASON-This is typically a slow time to list your property so many sellers do not place their properties on the market at this time of year (November-February).

3) LENDING-Many want-to-be sellers have found they either will not get enough from the sell of their current property as a future down payment thus these potential "move-uppers" are stuck for the short term OR even if they have a down payment after selling their current property due to stricter lending many will not qualify for a larger mortgage. These people are stuck for the short term.

4) ABSORPTION- We had a VERY busy year in the DC condo market due to low interest rates, first-time home buyer incentives and stronger consumer confidence; thus many properties were absorbed both new construction and resale.

By the end of November 2009, we had almost 22% less listings than the previous year; down from 1436 in 2008 to 1129 in 2009. A trend continued in the other direction with almost 14% more CONTRACTS year to year from 2008 to 2009. And actual SETTLEMENTS were up by over 8% from 2443 in 2008 to 2640 in 2009.

Home-buyer Tax Credit Update! (11/6/09)

A BIG thanks to our friend, Brad Cohen, at Mason Dixon Funding for the latest update on the HOME BUYER TAX CREDIT that went into law today.....

Brad Cohen

Vice President

Mason Dixon Funding

800 King farm Blvd. Suite 210

Rockville, Md. 20850

BCohen@masondixon.com www.0points.com

301-354-8266(office)

301-354-2866 (fax)

240-601-7556 (Cell)

Home-buyer Tax Credit Update!

On November 6, 2009, President Obama signed a bill to extend the tax credit for first-time homebuyers (FTHBs) through June 30, 2010. The bill also opens up opportunities for others who are not buying a home for the first time.

To learn what the new tax credit means to you take a look at the concise overview below.

TAX CREDIT OVERVIEW

Who Gets What?

First-Time Homebuyers (FTHBs): First-time homebuyers (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000

Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

Current Owners: The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

What are the New Deadlines?

In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.

What are the Income Caps?

The amount of income someone can earn and qualify for the full amount of the credit has been increased.

Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible

Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.

What is the Maximum Purchase Price?

Qualifying buyers may purchase a property with a maximum sale price of $800,000.

What is a Tax Credit?

A tax credit is a direct reduction in tax liability owed by an individual to the Internal Revenue Service (IRS). In the event no taxes are owed, the IRS will issue a check for the amount of the tax credit an individual is owed. Unlike the tax credit that existed in 2008, this credit does not require repayment unless the home, at any time in the first 36 months of ownership, is no longer an individual’s primary residence.

How Much are First-Time Homebuyers (FTHB) Eligible to Receive?

An eligible homebuyer may request from the IRS a tax credit of up to $8,000 or 10% of the purchase price for a home. If the amount of the home purchased is $75,000, the maximum amount the credit can be is $7,500. If the amount of the home purchased is $100,000, the amount of the credit may not exceed $8,000.

Who is Eligible fort FTHB Tax Credit?

Anyone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title, is eligible.

This applies both to single taxpayers and married couples. In the case where there is a married couple, if either spouse has owned a primary residence in the last 36 months, neither would qualify. In the case where an individual has owned property that has not been a primary residence, such as a second home or investment property, that individual would be eligible.

As mentioned above, the tax credit has been expanded so that existing homeowners who have owned and occupied a primary residence for a period of five consecutive years during the last eight years are now eligible for a tax credit of up to $6,500.

How Much are Current Home Owners Eligible to Receive?

The tax credit program includes a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Can Homebuyers Claim the Tax Credit in Advance of Purchasing a Property?

No. The IRS has recently begun prosecuting people who have claimed credits where a purchase had not taken place.

Can a Taxpayer Claim a Credit if the Property is Purchased from a Seller with Seller Financing and the Seller Retains Title to the Property?

Yes. In situations where the buyer purchases the property, even though the seller retains legal title, the taxpayer may file for the credit. Some examples of this would include a land contract or a contract for deed.

According to the IRS, factors that would demonstrate the ownership of the property would include:

1. Right of possession,
2. Right to obtain legal title upon full payment of the purchase price,
3. Right to construct improvements,
4. Obligation to pay property taxes,
5. Risk of loss,
6. Responsibility to insure the property, and
7. Duty to maintain the property.

Are There Other Restrictions to Taking the FTHB Credit?

Yes. According to the IRS, if any of the following describe a homebuyer’s situation, a credit would not be due:

• They buy the home from a close relative. This includes a spouse, parent, grandparent, child or grandchild. (Please see the question below for details regarding purchases from “step-relatives.”)
• They do not use the home as your principal residence.
• They sell their home before the end of the year.
• They are a nonresident alien.
• They are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year. (This does not apply for a home purchased in 2009.)
• Their home financing comes from tax-exempt mortgage revenue bonds. (This does not apply for a home purchased in 2009.)
• They owned a principal residence at any time during the three years prior to the date of purchase of your new home. For example, if you bought a home on July 1, 2008, you cannot take the credit for that home if you owned, or had an ownership interest in, another principal residence at any time from July 2, 2005, through July 1, 2008.

Can Homebuyers Purchase a Home from a Step-Relative and Still be Eligible for the Credit?

Yes. As long as the person they buy the home from is not a direct blood relative, the purchase would be allowed.

If a Parent (Who Will Not Live In The Property) Cosigns for a Mortgage, Will Their Child Still be Eligible for the Credit?

Yes, provided that the child meets the other requirements for the tax credit.

2009 Results are in! DC hits #1 list for AMERICA'S FAVORITE CITIES

The 2009 TRAVEL + LEISURE America's Favorite City results are in!

This summer, you ranked 30 U.S. cities on their culture, shopping, restaurants, nightlife, and more. Below you can find where DC came out on top:

TYPE OF TRIP-
Cultural Get Away; #1-Washington DC
Family Vacation; #2-Washington DC

CULTURAL-
Museums/galleries; #1-Washington DC
Historical sites/monuments; #1 Washington DC

QUALITY OF LIFE-
Public transportation & pedestrian-friendliness; #2-Washington DC

For dozens of other categories and top place finishers, go to:

http://www.travelandleisure.com/afc/2009/

MARKET INFORMATION (3rd Q Report)- Delta Associates

The 3rd Quarter Market Information is in!!!
posted at www.DeltaAssociates.com


Some of the highlights (and GREAT NEWS).....
PLEASE go to www.DeltaAssociates.com for the full report.....

1) ECONOMY-Regional Downtown Ended During the First Quarter of 2009

The most recent data available suggests the recession in the Washington metro area ended during the first quarter of 2009 – coming out of this downturn ahead of nation. Although conditions remain sluggish, the worst conditions are behind us, as a slow recovery is underway. Notably, 42,600 net new jobs have been added since January 31, 2009. Although the recession has come to an end, sluggish conditions remain as a slow growth recovery is underway. Despite this, Washington maintains one of the strongest economic bases in the nation.

2) CONDOMINIUMS-Sales Volume Picks Up in Washington to the Highest Quarterly Volume in Two Years; Prices Down but More Moderately than Single Family Homes; Pipeline Declines Further, Product Shortage Seen in DC Metro by Late 2010.

Volume: New unit sales volume (defined as net binding contracts written with security deposits up) in the Washington metro area during the 3rd Quarter was 686 units, the highest quarterly sales volume in two years. In the past 12 months, there were 2,120 sales, which is an increase of 45% from the prior 12-month period.

Pipeline: There are currently 7,128 unsold new condominium units that are actively marketing in the Washington metro area. There is now 3.4 years worth of inventory of product on the market at current rates of sales velocity in the metro area. Arlington/Alexandria and the District are below the metro average and are approaching levels considered “product shortage”.

• 
  

*DELAYED* FHA Condo Financing Changes

FHA notice on delay in FHA condominium changes:

Implementation of FHA’s new policy guidance for condominium project approval and condo unit financing will be delayed until December 7^th 2009. The new guidance, to be issued within the next two weeks, will: 1) offer additional leniencies to address the difficult market conditions and 2) augment some portions of FHA Mortgagee Letter 2009-19, providing additional information and clarification.

Until the new guidance takes effect on December 7^th, 2009 lenders may continue to use the Spot Loan Approval guidance issued in Mortgagee Letter 1996-41. Further, the site condo and manufactured housing condo project changes that have already been implemented are not affected by this delay.

To read FHA Mortgagee Letters 1996-41 and 2009-19 please visit: http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/

FIRST SAVINGS MORTGAGE IS ONCE AGAIN OFFERING 5% DOWN PAYMENT FINANCING FOR WASHINGTON DC CONDOMINIUMS AND HOUSES

Gregg Busch does such a super job of keeping us updated on the latest loan products....
Here is a new one just in.....GREAT NEWS!!!!

FIRST SAVINGS MORTGAGE IS ONCE AGAIN OFFERING 5% DOWN PAYMENT FINANCING FOR WASHINGTON DC CONDOMINIUMS AND HOUSES. NO MORE HIGH COST FHA LOANS IF YOUR BORROWER IS WELL QUALIFIED!!!!

FEW IF ANY LENDERS ARE OFFERING 5% DOWN FINANCING UNLESS YOU GO THE COSTLY ROUTE OF FHA FINANICNG!!!!

95% FINANING UP TO $729,750 (CONDOMINIUMS LIMITED TO $417,000 WITH 5% DOWN PAYMENT)

FIRST SAVINGS MORTGAGE CAN STILL CLOSE LOANS UP TO $729,750 WITHIN 1 WEEK!!!!!

WE ONLY WORK WITH LOCAL APPRAISERS THAT KNOW AND LIVE THE IMMEDIATE DC AREA THAT ARE SEASONED!!!!!

I OFFER PRE-APPROVAL LETTERS WITHIN 1 HOUR!!!!!!

CALL FOR DETAILS!!!!!

Gregg Busch
Vice President
First Savings Mortgage Corporation
Direct Line - (703) 883-9580
Fax - (703) 564-4685
Cell - (202) 256-7777
E-mail - gbusch@firstsavings.com

8444 Westpark Drive, 4th Floor
McLean, VA 22102

As lenders clamp down, credit scores take a hit-USA TODAY-September 22, 2009

Read this in Tuesday's (September 22nd, 2009) USA TODAY issue......thought it was really on point and current.

As lenders clamp down, credit scores take a hit

By Kathy Chu and Sandra Block, USA TODAY

Long after the economy recovers, millions of Americans will be left with a grim legacy of the recession: damaged credit scores, the three-digit ratings that help determine consumers' ability to get loans and other types of credit.

Even though some consumers have seen their credit scores improve as they trim their debt, others have seen their scores drop significantly because of late payments on bills, foreclosures and rising credit card debt.

Meanwhile, lenders' actions during the recession are delivering another blow to borrowers — even some with pristine credit. Lenders are closing credit card accounts and lowering credit limits for millions of consumers and business owners who have never paid late. Some lenders are reporting mortgage modifications in a way that dings consumers' scores, dealing a setback to those trying to get their finances on track.

More lenders also are adopting a new scoring model the financial industry believes is better at predicting risk — but that could move consumers' scores more than 20 points up or down. The most widely used credit score, the FICO score, ranges from 300 (poor) to 850 (excellent). Consumers with scores above 750 generally qualify for the lowest-rate loans.

"The credit environment has a whole lot of moving parts that weren't there three years ago," says John Ulzheimer, president of consumer education for Credit.com. "Consumers can't just sit still and expect all is well."

From the third quarter of 2006 to the second quarter of 2009, the number of consumers considered "deep subprime" — with such low credit scores they qualify for credit only at steep interest rates, if at all — rose from 34.4 million to 39.8 million, according to research by the Experian credit bureau and Oliver Wyman, a consulting firm.

Meanwhile, the percentage of "superprime" consumers, who are able to qualify for the best rates, dipped in recent quarters, partly because more people paid their bills late, the firms found.

Lenders say they're taking steps to reduce their risk in a difficult economy. Some admit they're concerned about the impact of their actions on consumers' credit scores but say they have no control over how scores are determined.

"Banks have no motivation to take an action that will impair someone's ability to obtain credit," says Claudia Callaway, partner at Katten Muchin Rosenman, a law firm that represents lenders.

But consumer advocates say regulators and Congress need to address lender actions that are unintentionally hurting credit scores. They say that as underwriting standards tighten, even a small change in a credit score could affect what rate consumers get on a loan — if they get one at all. Some analysts also say the fact that consumers' credit scores can fall even if they've never missed a payment or exceeded their credit limits raises questions about the score's usefulness.

"All these changes are new structural changes in the financial system," says Leonard Bennett, a Newport News, Va., lawyer who has testified before Congress about credit-reporting issues. "The ability to predict risk and integrate that into a credit score — based on historic data — is logically impossible."

But Tom Quinn, a vice president at Fair Isaac, which created the FICO credit score, says its data show the scoring formula "is working," because it's able to rank consumers' riskiness.

For now, with little guidance from regulators, lenders are moving ahead with actions that could lower many consumers' credit scores and hinder their ability to get credit. Here's how:

for the rest of the story......click here......

http://www.usatoday.com/money/perfi/credit/2009-09-21-lenders-scores-credits_N.htm

DC Coop transer and recordation taxes start OCTOBER 1st, 2009!!!!!

Economic Interest Tax on Co-ops Begins Thursday, October 1, 2009

Many of you in the co-operative market in the District are aware, but for those who are not, this Thursday, October 1, the District government will begin charging an economic interest tax on the sale/transfer of co-operatives.

This economic interest tax (some may say recordation tax) of 2.2% will be assessed on the transfer of co-operative units less than $400,000 and 2.9% for transfer greater than $400,000. The rates and consideration numbers were intended to mirror recordation and transfer taxes currently charged on fee simple Real Estate transactions.

Unfortunately, amendments to the legislation this past Tuesday, have made some details and implementation issues of the economic interest tax unsettled

Effective October 1,2009 the District appears to be out of the business of identifying merely Vacant building and lots

District Class 3 Property Tax Rate to Focus on BLIGHT not Merely Vacant Properties

In a complicated , convoluted, roller-coaster ride of a debate with numerous twists and turns, the DC Council on Tuesday heard our cries and ELIMINATED the CLASS 3 property tax rate on VACANT properties, and created a new CLASS 3 property which focuses on BLIGHTED properties.

Effective October 1, the District appears to be out of the business of identifying merely Vacant building and lots, and now appropriately will begin focusing on identifying BLIGHTED buildings.

The Class 1 Property Tax Rate for Residential Properties will be $0.85 per $100 of assessed value.
The Class 2 Property Tax Rate for Commercial Properties will be $1.85 per $100 of assessed value.
The Class 3 Property Tax Rate for BLIGHTED Properties will be $10.00 per $100 of assessed value.

Since the relevant amendments and legislative language were created on the fly from the Council dais on the fourth reading of the budget, the actual legislative language that passed has not been made public and is likely to be quite messy and will need clarification.

We will definitely keep you posted as this discussion moves forward, but for now, let's just enjoy the moment that our long, hard-fought efforts have succeeded (for now) and the District will begin to focus their attention on BLIGHTED properties, not merely vacant ones. Hopefully, that will keep your clients from being ensnared in a higher property tax rate for merely vacant properties.

Below are links to articles from the Washington Business Journal, The City Paper, and a press release from Council Member Tommy Wells on the issue.

Washington Business Journal

The City Paper
Council Member Wells Press Release

WALLS IN COVERAGE now REQUIRED on Condo Master Insurance Policy!!!

FANNIE MAE / FREDDIE MAC, FHA / VA ARE NOW REQUIRING WALLS IN COVERAGE ON CONDOMINIUMS MASTER INSURANCE POLICY!!!!!

What is WALLS IN COVERAGE?

Coverage on the interior walls and for personal property held within the dwelling. If a condominium's master policy does not have walls in coverage for the building, then you must inform your purchaser that they need to call an insurance agent (i.e.: State Farm, Allstate, etc) and get a HO-6 policy (known as a renters insurance by most).

If the policy does state that there is walls in coverage it MUST specifically state replacement of improvements and betterment coverage to include improvements that the current owner has made to the unit, otherwise lenders will still ask for a separate renters policy!!!

Many thanks to Gregg Busch for providing this information!!!

Gregg Busch
Vice President
First Savings Mortgage Corporation
Direct Line - (703) 883-9580
Fax - (703) 564-4685
Cell - (202) 256-7777
E-mail - gbusch@firstsavings.com

8444 Westpark Drive, 4th Floor
McLean, VA 22102

FHA CONDOMINIUM GUIDELINES...UPDATE!!!!!

FHA WILL POSSIBLY BE SUSPENDING THE NEW CONDOMINIUM GUIDELINES THAT WERE SUPPOSE TO GO INTO EFFECT OCTOBER 1^ST TO NOVEMBER 1^ST SO THEY CAN WORK THREW SOME CHANGES THAT WERE NEGATIVELY GOING TO EFFECT THE CONDO MARKET.

THIS MEANS LENDERS MAY STILL BE ABLE TO USE THE OLD SPOT LOAN APPROVAL PROGRAM UNTIL NOVEMBER 1ST. FHA SHOULD BE MAKING THE OFFICIAL ANNOUNCEMENT SOMETIME THIS WEEK.

Many thanks to Gregg Busch for this IMPORTANT update!

Gregg Busch
Vice President
First Savings Mortgage Corporation
Direct Line - (703) 883-9580
Fax - (703) 564-4685
Cell - (202) 256-7777
E-mail - gbusch@firstsavings.com

8444 Westpark Drive, 4th Floor
McLean, VA 22102

Credit Scores and the 20% RULE!!!!!

There is SO much confusion on FICO and how to maintain or get a great credit score. Talk to three bankers and you will get three answers....But I did find a tip that I am confident will help each of us......

How much you owe versus how much credit has been extended to you is the second most important factor in determining your score. FOR EXAMPLE, if you've charged $5,000 on credit cards and have $50,000 in credit, your rate is 10 percent, which they say is "ideal" though you can go up as far as 20 percent and still keep a good score. Once you consistently go over 20 percent, you begin to ding your credit score.

Another important point to follow is when you are looking to purchase a property do NOT have more than three (3) lenders pull your credit report within a 90-day period or your credit scores will go down. If you need to "shop" around for the best rate, quote them the FIRST credit score you had pulled and get their quote.

Pepco announces that District of Columbia residents now have the opportunity to purchase Compact Fluorescent Light (CFL) bulbs at reduced prices

Washington - Pepco announces that District of Columbia residents now have the opportunity to purchase Compact Fluorescent Light (CFL) bulbs at reduced prices from stores within their community. Pepco has selected Honeywell Utility Solutions as the implementation program manager. They will run the energy efficiency and new environmentally friendly green technologies conservation program for residential customers in the District of Columbia.
This is the initial phase of the energy-efficiency program that Pepco will offer to District of Columbia residential customers. The second phase of the program will offer rebates on selected high energy efficient appliances such as window air conditioners, refrigerators and electric water heaters.
More than 40 hardware, drug and food stores are expected to offer the Pepco discount of $1.50 on select single bulbs and $3 off multi-packs. ??All bulbs are ENERGY STAR qualified.
This program supports President Barack Obama's vision for a new energy economy that will transform the way we use energy, said Thomas Graham, President of the Pepco region.

This program will expand the ability for residents to purchase these light bulbs, which save energy, save money and help save our environment.
The initial participating retailers are The Home Depot and True Value Hardware. ??Additional retailers Rite Aid, ACE Hardware, CVS, Giant Food and Safeway stores are targeted for later this summer. ??Customers can check pepco.com periodically to review the active locations.

Pepco, a subsidiary of Pepco Holdings, Inc. (NYSE: POM), delivers safe, reliable and affordable electric service to more than 750,000 customers in Maryland and the District of Columbia.


Brianne Kruger Nadeau
Commissioner, ANC 1B05
http://www.BrianneKNadeau.com

Inclusionary Zoning (IZ) LAW requires developers (10 units+) to offer affordable housing!

***Special thanks to Cheryl Cort (member of Campaign for for Mandatory Inclusionary Zoning) for this information!***

Inclusionary Zoning started on Friday, August 14. Thanks to Councilmember Graham & Chairman Gray for seeing that the administration finally implemented this important affordable housing program.

After years of delay, on Friday, the Fenty Administration issued the last piece of regulations to put in place the Inclusionary Zoning affordable housing program enacted into law in 2006.? This program will require that any development over 10 units offer 8-10% of the units at prices affordable to moderate & low income households.

Special thanks to Councilmember Jim Graham & Chairman Vincent Gray. Without their unwavering commitment to push Mayor Fenty to implement the regulations, this day might have never come. The Council twice passed laws introduced by Graham & Gray setting deadlines for the Mayor to issue the regulations needed to start implementing the Inclusionary Zoning program that Fenty, as a councilmember, had supported.

The 14th & U Utopia project orginally included affordable IZ units, but due to the Fenty administration' s footdragging, the affordable units were eliminated from the project. While the 2 year delay meant we lost well over 100 units of affordable housing - many in the U Street neighborhood, now we can look forward to any sizable project in the future providing mixed income housing opportunities. Once the economy recovers, IZ will provide an important contribution to maintaining the diversity of our communities.

Thanks again to Councilmember Graham, Chairman Gray, and the rest of the Council to holding firm and ensuring that the Fenty administration finally launched this important affordable housing program.

Looking for affordable housing? Check out: www.dchousingsearch .org
Learn more about IZ at: http://dhcd. dc.gov/dhcd/ cwp/view, a,1243,q, 647468.asp

Cheryl Cort
(member of Campaign for for Mandatory Inclusionary Zoning)

Looking Forward in the Mortgage Market -- August 11, 2009

Looking Forward in the Mortgage Market -- August 11, 2009

Courtesy of: Jordan Milne of Chevy Chase Bank, a division of Capital One, N.A.

Just when you thought it was safe to go back in the water, Taylor Bean & Whitaker abruptly ceased operations. It is never good news when the fellows in the windbreakers show up, and this time was no exception. In the words of TBW’s chairman, Lee Farkas, “It’s the saddest day of my life.”

Market	Close	Wk Chg
30-Yr Agency Note Rate	5.57%	+0.24%
30-Yr Mortgage Yield	4.67%	+0.29%
Note Rate vs. MBS Yield	0.90%	-0.05%
Mortgage-Treasury	1.90%	-0.05%
10-Yr Treasury	3.86%	+0.38%
2-Yr Treasury	1.32%	+0.20%
10yr- to-2yr Spread	2.54%	+0.17%
Fed Funds	0.19%	0.00%
Fed (Aug ‘09)	0.24%	+0.03%
Fed (Feb ’10)	0.81%	+0.20%
Dow Industrials	9,370	+198

TBW, ranked 12^th in national origination volume, left at least 600 banks and many independent mortgage companies wondering what to do with their loan locks, and many very qualified mortgage bankers wondering what happened to their jobs. TBW was leading an effort to raise $300 million of private equity to shore up Colonial Bank. That deal fell apart too. Rumors are swirling about the viability of Colonial, a bank that provides 20% of the mortgage industry’s warehouse lines.

The TBW news is a blow to a mortgage industry already struggling with higher interest rates. Friday’s could-have-been-worse jobs report sent Treasury yields to their highs of the year. Futures are pricing in a Fed rate increase by the end of the year. Though the economy could still stumble – where is the real growth going to come from – rates could push higher this week. The market is coming to grips with an economy that is no longer on the ropes. In the months ahead, it is likely that mortgage rates will be range-bound, pushing towards 6.00% when the economic news is good, and falling back to 5.00% when the news is bad.

There are some green shoots in the housing business. Home prices posted their first month-to-month rise in three years. Origination profits are pushing towards 1.00% in yield, after hitting a post-refi low of 0.75%. Mortgage rates are near 5.50% – not a great level, but pretty good nonetheless. Rates owe much of their recent decline to further compression in the mortgage-Treasury yield spread. At 1.90%, the spread is near the year’s lows, and down considerably from 2.25% some weeks ago.

The economy shrank just 1% last quarter. The recession, now in its 19th month, has been the most severe since quarterly numbers were first published in 1947. But it is probably over. Recent reports suggest that GDP will expand an annualized 3% this quarter.

News that the economy’s decline is decelerating helped send stocks higher for a fourth straight week. Stocks had their best July in 12 years, with the S&P 500 up 7.4%. Stocks just had their best five-month run since 1938 – up nearly 50%; the S&P 500 is 19% below levels set before Lehman Brothers' collapse last September. Barron’s, however, warns of a 760x P/E ratio (based on reported earnings), and of a huge rally while two million jobs evaporated. The paper exclaims “that the marginal buyer of equities today may well be the same person who was loading up on real estate during the summer of '06."

You know it’s a bad day when people like the IRS more than you. Such is the case for Ben Bernanke. Americans currently rate the Federal Reserve lowest of any government agency, even below the IRS. In a recent Gallup poll, only 30% said the nation's central bank was doing an excellent or good job, trailing the IRS at 40%. Top marks went to the Centers for Disease Control with 61%, followed by a tie between NASA and the FBI at 58%.

Thanks for your business and have a good week. – Jordan Milne

Thank You,

Jordan Milne

Jordan T. Milne

Senior Mortgage Loan Officer

Chevy Chase Bank, a division of Capital One, N.A.

O. 240. 497. 8533 | F. 240. 497. 8098 | C. 240. 423. 8717

New FHA Guidelines Could Change the Condo Market Forever!!!!

WOW....my vacation to Brazil was SUPER!!!! So here are a few posts to catch up for when I was away....this is from my friend, Gregg Busch, at First Savings......

AGENTS AND PROSPECTIVE BUYERS BEWARE!!!!! URGENT NEWS!!!!!!

You need to pay attention to some recent changes HUD (Department of Urban Housing and Development) is making that affects condominiums.

In the past, you only needed to satisfy one of the following two criteria?s to finance a condo unit using FHA financing.

1.) The Condo Project has a FHA warranty

- This requires the Homeowners Association of the condominium project to apply and receive a warranty on the project from the HUD.

2.) The unit must pass a questionnaire called a ?Spot Check? done on an individual basis

HUD recently released an announcement that they will be changing the guidelines which includes the removal of ?Spot Check? approvals which means you will only be able to get a FHA loan on a condo if the project has a warranty. (Mortgage Letter 2009-19).

FHA loans now represent more than 25% of all home purchases. If you are selling a condo in a complex that does not have a FHA warranty, you are eliminating 25% of the buyers today. As our current real estate market has shown that when the ability to obtain financing for a property becomes more difficult, values drop.
WHAT THIS MEANS TO YOU IF YOU?RE A CONDO BUYER

Whether you?re looking to buy using FHA financing or not, this should still affect your buying decision. You don?t want to buy a property that will be more difficult sell down the road. If you find a condo that does not have a FHA warranty and you really want to buy it, know that October 1^st is the date the new guidelines go in affect. Also, many lenders will adopt this policy prior to this date, so be sure to check your lender. If you do buy using the ?Spot Check? approval now, I would recommend you actively speak to the homeowners association about making the property FHA warrantable immediately after you close on your purchase.

WHAT THIS MEANS TO YOU IF YOU?RE A CONDO OWNER

Check immediately to see if your condo has a FHA warranty. If it has a FHA warranty, you?re good! If it is not a FHA warrantable complex, speak to the Homeowners Association immediately about getting the complex FHA warrantable. The key is to get your complex a FHA warranty PRIOR to the October 1^st date. Keep in mind that the turn times to get a warranty will be based highly on the amount of submissions HUD receives. Everybody will likely

FHA received a wave of applications and submissions. Try to be ahead of the curve.

IS THIS THE ONLY NEW CHANGE?

I?m happy to say that even though this change could potentially be extremely damaging to condo values, there are some positive changes on the 2009-19 HUD letter.

1.) Direct Endorsement Lenders can approve a project (First Savings Mortgage is a direct endorsement lender)!!!!!

a. This means that a FHA lender can actually do the warranty process for HUD. This is great if your lender is a DE (Direct Endorsement) lender as they can approve the entire project then provide you the financing to close

2.) Site Condominiums will not require a Condominium Project approval

a. Site Condos are single family detached dwellings. These will be looked at almost identically like a standard Single Family Residence to the FHA lender.

3.) Refinancing a condo that?s not warrantable that already has a FHA loan does not require a warranty when refinanced to another FHA lender

4.) No Project Approval is needed for buying a HUD foreclosure condo

What does this mean to existing projects that have FHA approvals currently and the Warranty Insurance?

Projects consisting of three or less units will have no more than 1 encumbered with FHA insurance.

Projects consisting of four or more units will have no more than 30 % of the total units encumbered with FHA insurance.

Please call me with questions. Get your buyers familiar with the changes and closed before the 30^th of September if they are buying an FHA condo and before Nov. 30^th if they want the $8000 first time home buyers credit.

Gregg Busch
Vice President
First Savings Mortgage Corporation
Direct Line - (703) 883-9580
Fax - (703) 564-4685
Cell - (202) 256-7777
E-mail - gbusch@firstsavings.com

8444 Westpark Drive, 4th Floor
McLean, VA 22102

Government Regulation Clogs the (LENDING) Pipes; Looking at HVCC and HERA

It's no secret that many facets of lending and real estate have changed as a result of the credit crisis. In addition to tightened lending practices that resulted from rising mortgage delinquencies, Washington has been heavily involved in altering the way lenders do business today.

Two individual pieces of legislation impacting our business need to be taken into account when determining closing dates for purchase transactions.

Home Valuation Code of Conduct (HVCC) went into effect May 1, 2009. Intended to shield appraisers from undue influence from loan officers and lenders, this legislation installed a "firewall" between those individuals directly involved in the origination of the loan from the selection of and contact with appraisers.

HVCC also requires that borrowers receive a copy of the appraisal a minimum of three days in advance of closing. Part of the kicker here is that "received" is considered, in effect, three business days after the appraisal has been mailed to the borrower.As HVCC requires a firewall between the originator and the appraiser, the time to receive an appraisal has increased, in some cases by as much as two weeks or more. While this may not always be the case, it is important to take into consideration when considering closing dates. Today, conservative closing dates are mandatory to properly manage expectations of all parties.

Housing and Economic Recovery Act (HERA) amends and impacts several aspects of obtaining a mortgage, the disclosures required for borrowers, and the timing of their delivery. This impacts the minimum time required to close, and should any changes be made to a loan application that could impact the Annual Percentage Rate (APR), this could impact the closing date.

Other than paying for a credit report, lenders may not accept any additional fees from a borrower until four business days after disclosures have been provided to or mailed to a borrower. This has the potential to delay several aspects of the application process.

What Now? – While there is more we can discuss on the specifics of these legislative implications, I felt it important enough to let you know now that I would not recommend you write purchase contracts with short closing time frames (30 days at a minimum and ideally not less than 45 days).

-Francki DiFrancesco

DC transfer and recordation tax SURPRISE!!!!!!!

GET READY TO PAY MORE AT SETTLEMENT FOR THE DC TRANSFER OR RECORDATION TAXES!!!!!
In the past when our DC Clients went to settlement the selected Settlement Company would collect the 1.1% tax or 1.45% tax from BOTH Buyer and Seller (DC) based off the CONTRACT/PURCHASE PRICE of the transaction. (1.1% for residential properties <$400,000 and 1.45% for residential properties >$400,000.00) Things are changing......

On a recent transaction one of our Buyers purchased a foreclosure for $64,000; a steal to be sure! The assessed value for 2010 is over $200,000.00 The nationally known settlement company who we use quite a bit and is phenomenal, collected the usual taxes from both parties. A few short weeks later, DC contacted the settlement company to advise them that the taxes should have been collected on the proposed 2010 assessed taxes for the property, not the contract/purchase price. They explained that this has ALWAYS been the law; it just has not been interpreted this way or enforced. A lot of back and forth went on that I am not going to include here, but I appreciate the settlement companies attempt to get this over turned.....here is the point from the settlement company....

Dear Ms. Williams:

This transaction is a small one and I know Larry Todd has greater issues on his plate. I have been unable to get him to focus on the difference between assessed value, nominal consideration and fair market value. As a result, he has rejected the recording of this Deed without payment of recordation and transfer taxes that he says are due based on the 2010 assessed value of the property, because the sales price is less than 30% of it.

I don't believe that formula applies to this transaction.

Definitions according to the D.C. Code:

Recordation Tax:

The recording of all deeds to real estate in the District. The basis of the tax is the value of consideration given for the property. Where there is no consideration or where the consideration is nominal, the tax is imposed on the basis of the fair market value of the property.

DC Code Citation: Title 42, Chapter 9.

Transfer Tax:

Each transfer of real property at the time the deed is submitted for recordation. The tax is based upon the consideration paid for the transfer. Where there is no consideration or where the amount is nominal, the basis of the transfer tax is the fair market value of the property conveyed.

DC Code Citation: Title 47, Chapter 9.

Nominal Consideration:

In the Final Rulemaking of 1999 it states: "there are no regulations governing the basis on which the Recorder of Deeds may deem consideration paid to be nominal. Under these final rules, the fair market value of the property may be deemed nominal where the consideration paid bears no resemblance to the fair market value of the property".

The Final Rulemaking goes on to state that "under D.C. law, the recordation tax is assessed based on the consideration paid, and the transfer taxes are paid based on the higher of the assessed value or the sales price, unless no consideration is paid and/or the consideration paid is deemed to be nominal."

Further, the Final Rulemaking states that if the consideration paid is deemed to be nominal, the recordation and transfer taxes are then based on the fair market value of the property.

Fair Market Value:

"The most probable price at which a particular piece of real property, if exposed for sale in the open market with a reasonable time for the seller to find a purchaser, would be expected to transfer under prevailing market conditions between parties who have knowledge of the uses to which the property may be put, both seeking to maximize their gains and neither being in a position to take advantage of the exigencies of the other". DC Code 47-802(4)

It appears to me that Mr. Todd is defining "fair market value" as the assessed value of the property, which it is not in an arms length transaction, such as this one.

The assessed value is an element used to determine nominal consideration, not the fair market value of the property.

I do not believe that the D.C. law intended for the Recorder of Deeds office to penalize D.C. homeowners by taxing arms-length transactions in which there is actual consideration and fair market value, because the fair market value of the property is less than 30% of the assessed value.

I believe that it was intended as a formula for taxing non-arms length transactions in which there is no actual consideration of there is a claim that the consideration is nominal, but when the consideration is nominal but there is actual consideration, then the tax is to be paid based on that consideration, if it is fair market value.

Attached are the documents that support that this is an arms-length transaction in which there is actual consideration paid. The contract is proof of this and the appraisal supports that the consideration paid fits the definition of "fair market value". The only other document that I can provide in support of this argument is a copy of the MRIS listing that shows how long the property has been on the market and the reductions in the asking price before a purchaser was found.

I know you are not in a position to overrule Mr. Todd's decision, but I value your opinion. Can you explain to me the flaw in my logic?

Thank you for taking the time to review this matter.